Fee-for-Service vs. PPO Insurance: Where Should Your Dental Practice Be on the Scale?
- Russ Ledbetter
- May 27
- 10 min read
Are you considering what to do about enormous PPO insurance write-offs?
Are you tired of doing $3 million worth of dentistry at your practice’s fees, yet only collecting $1.5 million because of PPO write-offs? Would you rather bill $1.5 million and collect $1.5 million? Or better yet, would you like to bill $3 million and collect $3 million?
That is a legitimate question.
A $1.5 million write-off is a lot of free dentistry. So, are PPO insurance plans a necessary evil? That is another good question, and the answer depends on your practice.
It depends on your circumstances, your patient base, your new patient flow, your local market, and where you realistically want your practice to be on the PPO to Fee-for-Service insurance scale.
In the sections below we will discuss:
Overview — Understand the PPO/FFS Scale
Identify — What PPO Participation Iifs Really Costing You
Evaluate — What Your Practice Can Realistically Support
Change — Move Carefully Toward the Practice You Want
Section 1: Overview
Think of PPO and Fee-for-Service as a Scale, Not an All-or-Nothing Decision
The question is not always, “Should I drop every insurance plan and go completely Fee-for-Service?”
The better question is, “Where do I want my practice to be on the scale?”
Do you want to be 100% insurance-based? 80% PPO? 40% PPO?
Or, would you like to eliminate all PPO participation (move toward 100% Fee-for-Service)?
About 1 in 8 of my clients are 100% Fee-for-Service and participate in no PPO insurance plans at all. The others fall somewhere across the scale. Some participate with only one or two major insurance companies. Others participate with most major PPO plans.
Many Fee-for-Service practices still choose to file insurance for their patients. The difference is that they do not discount their fees. The patient is responsible for the difference between the practice’s fee and what the insurance company pays.
So, moving toward Fee-for-Service does not always mean you stop helping patients with insurance. It means you stop allowing the insurance company to dictate your fees.
Moving Toward Fee-for-Service Requires Value Patients Can Feel
If you want to move toward Fee-for-Service, you need to provide a level of service and patient experience that justifies the additional out-of-pocket cost to the patient.
In my opinion, a successful Fee-for-Service practice needs to provide:
a nice, clean, modern facility in a good location
updated, high-end equipment with the latest technology
highly professional, friendly, likable staff
a high level of customer service
a strong warranty policy
You may already have much of what is necessary to be successful as a full Fee-for-Service practice. You may have bought an insurance-heavy practice, or you may have gotten on every plan right out of school just to get on your feet. That does not mean you have to stay there forever.
Regardless, patients must experience value for the extra money they are spending. You have to provide something they believe they cannot get just anywhere else.
Fee-for-Service Does Not Mean “Spa Dentistry”
For clarity, I am not talking about “spa dentistry.”
A Fee-for-Service practice does not need to offer massages, hand treatments, tanning beds, or other extras like that. I am talking about the quality of the dental experience itself: the dentistry, the communication, the service, the trust, and the professionalism patients feel from the moment they walk in the door.
That is what makes a patient willing to pay more out of pocket to stay with you.
Section 2: Identify
First, Look at Gross Production — Not Just Net Production
Run a production report for the last 12 months, but make sure you are looking at gross production, not just net production.
Many dentists never really see the amount they are writing off. Their practice management software may have insurance fee schedules built in, so a $1,500 crown may show up on the schedule as $725 because that is the PPO-allowed fee.
That means the practice performed a $1,500 procedure, but the insurance adjustment reduced the collectible production by more than 50%.
The same thing can happen across an entire day. Your report may show that the practice produced $9,500 in net production. But if those same procedures had been calculated at your practice’s full fees, the gross production may have been $17,500.
That difference matters.
So, even if it is painful to see, run a gross production report for the last 12 calendar months. Then compare it to your net production or collections for the same period.
Until you know the difference between what you produced at your full fees and what you were allowed to collect after PPO adjustments, you cannot make a smart decision about where your practice should be on the PPO to Fee-for-Service scale.
Do Your Homework Before Making Changes
I am by nature a very conservative and cautious person. Therefore, my suggestion is to do your homework before making changes.
Do not guess. Do not drop plans emotionally. Gather the information you need so you can make smart choices.
Now you know the difference between gross and net production. The next step is to look at the plans individually.
Identify Every Plan You Are On
Make sure you know exactly which PPO plans and insurance networks you participate with. Many dentists are surprised when they finally look closely and see how many plans they are actually tied to.
How Many Active Patients Are on Each Plan?
This matters because a plan that affects a large percentage of your patient base carries a very different level of risk than a plan that affects only a small percentage.
If a plan represents a small number of patients and produces a large write-off, that may be a very different decision than a plan that represents a large portion of your active patient base.
What Is the Write-Off Percentage for Each Plan?
The best way to do this is to look at your bread-and-butter services, not necessarily the entire fee schedule. Look at common procedures such as:
Crowns
Build-ups
Two-surface fillings
Adult prophy
Periodic exam
Comprehensive exam
Bitewing X-rays
Extractions
Partials
Compare your practice fees to what each PPO plan allows for these common procedures. That will give you a clearer picture of which plans are creating the largest write-offs.
How Much of Your Production Is Tied to Each Plan?
Patient count alone does not tell the whole story. One plan may have a high write-off, but if that plan represents a large portion of your production, dropping it may require more caution. Another plan may have a similar write-off, but only a small number of patients and very little production attached to it. That plan may be much easier to eliminate first.
Each of these data points should be considered individually and together.
Once you have that data, you can start making smart choices instead of emotional ones.
Section 3: Evaluate
Your Current Circumstances Affect Where You Can Be on the Scale — For Now
Your current circumstances play an important part in deciding where you can be on the PPO insurance to 100% Fee-for-Service scale. Those circumstances may also determine how quickly you can change your position.
If you purchased a practice with an outdated office, older equipment, paper charts, limited technology, and a team that needs improvement, you are probably not ready to drop every insurance company and go full Fee-for-Service.
If you want patients to pay more out of pocket to stay in your practice, they have to feel that the practice is worth it. The more ordinary, outdated, or replaceable the practice feels, the harder that will be.
Circumstances Can Be Changed
Even still, those circumstances are changeable.
You can relocate to a better, more modern facility. You can buy new equipment. You can change or train your staff. You can improve your systems. You can make the practice feel more professional, more comfortable, and more valuable to the patients you want to keep.
Of course, that takes money and effort. But where you are today does not have to be where you stay.
New Patient Flow Is a Major Factor in Moving Away From PPOs
Your new patient flow plays a significant role in your ability to move toward full Fee-for-Service or selectively drop PPO plans.
If your new patient flow is very low, moving away from PPOs will be much more difficult. You may need to invest in marketing and build stronger new patient demand before you start dropping plans.
If your new patient flow is strong, the transition becomes easier.
Why? Because when you drop insurance plans or stop being a PPO provider, some patients will leave. The stronger your new-patient flow, the better positioned you are to replace those patients with new patients who are not tied to the same PPO discounts.
What Happens When You Stop Participating in a PPO Plan?
When you drop insurance plans or stop being a PPO provider, three things will happen.
Some Patients Will Leave the Practice and Never Return
They are 100% price-driven and feel zero loyalty. They will go wherever their out-of-pocket cost is lowest.
Some Patients Will Stay
They will pay the extra cost. They like you and your staff. They feel comfortable in your practice. They do not want to go out and experiment with other available options. They prefer the known, which is you.
Some Patients Will Leave and Then Come Back
Because they did not like the new office that participates in their network.
They may discover that the lower out-of-pocket cost did not make up for the difference in experience, trust, comfort, convenience, or quality.
It is impossible to say what percentage of patients will fall into each category. The stronger the bond you have with your patients, the more likely they are to stay or return.
Losing Patients Does Not Always Mean Losing Money
Keep in mind that losing some patients does not automatically mean losing money.
Hypothetically, a practice could lose 50% of its patients and still collect the same amount if the patients who remain are no longer tied to deep PPO write-offs. You may produce less total dentistry, but you may also write off far less of what you produce.
That is not to say you should casually drop plans and assume everything will work out. The point is that patient count, gross production, net production, and collections are not the same thing.
A practice can be extremely busy and still give away a huge amount of dentistry through PPO write-offs. Another practice may see fewer patients, do less gross production, and still collect the same or more because the reimbursement is better.
That is why you have to look at the numbers before deciding which plans to keep, which plans to drop, and how quickly to make changes.
Decide Where You Realistically Want to Be
After you understand the numbers, your circumstances, and your patient base, you can determine where you realistically want to be on the PPO/Fee-for-Service scale.
Can you tolerate one or two PPO plans? Can you tolerate more than that? Are you on too many plans and simply want to scale back, but not eliminate PPOs altogether?
Are you willing to make the effort and spend the money required to set yourself up to be successful as a full Fee-for-Service practice?
Only you can decide that.
But the decision should be based on your actual numbers, your patient base, your local market, your new patient flow, your facility, your staff, your systems, and your risk tolerance.
Rising Costs Make PPO Decisions More Urgent
Dental costs are skyrocketing even faster than general inflation.
Supplies, staffing, equipment, rent, interest rates, and everything else keep rising. Some plans may not be making you any money at all.
That is why I highly recommend doing the research. Some plans will stick out like a sore thumb and scream, “Drop me!”
Section 4: Change
Ready to Eliminate Some PPO Plans?
Once you know your numbers, you can begin deciding whether some PPO plans need to be eliminated.
The key is not to make a reckless decision. The key is to start with the plans that make the least sense for your practice.
Start With the PPO Plans That Make the Least Sense — For You
For example, if you are a PPO provider for XYZ Insurance Company, and only 7% of your patients are on that plan, and the write-off is 53%, then that may be the plan to drop first.
It affects a relatively small portion of your patient base, but it creates a large write-off. If the production tied to that plan is not significant enough to justify the discount, it may not make sense to keep it.
Drop that plan and wait a few months to see what happens.
If the impact is almost imperceptible, go to the next plan on the list and consider dropping it. Then wait several more months and evaluate again.
This is a conservative way to move closer to where you want to be without putting the entire practice at risk in one decision.
Watch the Schedule After Each Change
Keep in mind that if you are booked out for five months in hygiene and three weeks on the doctor’s schedule, and then you drop a company or two and are booked out four months in hygiene and a week and a half on the doctor’s side, you have lost nothing.
In fact, you may have gained.
You now have a larger percentage of patients on the doctor and hygiene schedules who are being reimbursed at a higher rate. Over time, the practice can actually become more productive, even if the schedule is not booked out quite as far.
The goal is not just to stay busy. The goal is to be productive, profitable, and paid appropriately for the dentistry you provide.
Be Practical About Local Market Realities
You have to be pragmatic as well.
If you are in a small town with a Walmart and a Walmart Distribution Center, if then, 40% of your patients work for Walmart and Walmart has Delta Dental — then you may not be able to drop Delta Dental PPO.
It just depends on your circumstances.
That is why there is no one-size-fits-all answer. A plan that should be dropped immediately in one practice may be a plan another practice has to keep, at least for now.
The answer depends on the numbers, the patient base, the local employers, the level of patient loyalty, and the practice’s ability to replace patients who leave.
Move Carefully, But Keep Moving Toward the Practice You Want
Take your time. Be conservative. Be deliberate.
But get off plans that do not make sense or make money.
Keep going until you get your practice where you want it to be on the Fee-for-Service to PPO insurance scale.
You do not have to make the entire move at once. You do not have to become 100% Fee-for-Service overnight. But you do need to know your numbers, understand your write-offs, evaluate your patient base, and make intentional decisions instead of simply staying on every plan because that is what you have always done.
The goal is to build a practice that is productive, profitable, and positioned where you want it to be.
If you are not sure which PPO plans are helping your practice and which ones are holding it back, The Ledbetter Group's dental consulting services help dentists evaluate their numbers, the schedule, and the systems behind practice production. Schedule a Free Consultation.
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About the Author
Russ Ledbetter is a dental practice consultant with The Ledbetter Group. Since 1989, for over 35 years he has worked inside dental offices to improve production, strengthen systems, and develop high-performing teams—without raising fees or changing clinical philosophy. Learn more about Russ and our Dental Consulting Services.
